Sumitomo buys Italy’s Lafert for €172m to boost its motors arm

29 May, 2018

Japan’s Sumitomo Heavy Industries (SHI) is buying the Italian electric motor manufacturer Lafert for €172.65m to reinforce its position in the motors market, to expand its product portfolio, and to reach a wider range of customers. Lafert will join SHI’s Power Transmission and Controls (PTC) division – which uses the Sumitomo Drives Technologies brand – and will become its r&d competence centre for motors.

SHI is aiming to boost PTC’s revenues from a planned 115bn yen (€884m) in 2019,to more than 200bn yen (€1.5bn), both through organic growth that is faster than the market, and inorganic growth including acquisitions and alliances.

Lafert, founded in 1962, had revenues of almost €150m last year – 9% higher than in 2016 – and employs almost 800 people. It has four factories in Italy, and one each in Slovenia and China. In 2016, AC induction motors accounted for more than half of its revenues, with servomotors and drives contributing 30%, and PM synchronous motors representing a further 17%. Almost a third of its revenues come from industrial machinery applications, 25% from HVAC and refrigeration, and 16% from materials handling. Italy accounts for 27% of Lafert’s revenues, with the rest of Europe adding a further 46% and North America contributing 17%.

In the first quarter of 2018, Lafert’s revenues were 17% higher than the previous year.

Sumitomo’s PTC has earmarked robotics/positioning, materials-handling and food & beverage, as priority targets to expand its business. It is planning to broaden the portfolios of both SHI and Lafert and to target a wider range of customers. SHI also says that it is planning to use technologies derived from Lafert’s r&d activities in its own products.

Lafert says that there are no overlaps between its own portfolio and that of Sumitomo’s Power Transmission & Controls group. PTC’s general manager, Toshiharu Tanaka, adds that PTC and Lafert have “highly complementary” technologies and products, including high-efficiency permanent magnet and gear-motors, integrated zero-backlash servo-actuators, and compact servo gear-motors for applications such as automatic guided vehicles.

The Lafert acquisition will add six factories to Sumitomo's existing portfolio

Following the acquisition, Sumitomo’s motors business will be worth around €250m, with asynchronous motors accounting for almost two thirds of its business (64%), followed by brushless servomotors and torque motors (24%) and PM synchronous motors (12%). The aim is to boost the combined operation’s revenues to €400m by 2025.

Sumitomo says that all of Lafert’s facilities and staff – including its top managers – will be “maintained and enhanced”. Lafert will continue to manage its own sales, marketing, r&d and engineering activities.

SHI’s acquisition of Lafert is expected to be completed by the end of June 2018. Following the deal, electric motors will make up almost half of Sumitomo Drives Technologies sales in Europe, the Middle East, India and Africa, followed by precision gears (19%), gearboxes (18%), services (8%) and geared motors (6%).

SHI employs 20,000 people worldwide and generated revenues of more than €6bn in 2017. Last year, its PTC division achieved almost €1bn of sales with an operating margin above 10%.